Use of credit scores by insurers has come into prominence within the last ten years. A recent study found that more than 90 percent of personal lines insurers use credit scores for rating or underwriting private automobile insurance (Conning & Co., 2001), and many insurers also use credit scoring for homeowners coverage. Such scores are distinguished from credit scores used in financial underwriting. While both lending and insurance scores have many elements in common, insurance-based credit scores purport to predict the risk of insurance loss rather than the risk of financial default. .
